MARKET REPORT: Housebuilders on the transfer as income enhance

There was finally a smattering of better news from the beleaguered housebuilding sector.

Persimmon rallied from its lowest level since late 2023 by 5.5 per cent, or 58p, to 1114p after reassuring investors that annual profits were likely to be towards the upper end of the range analysts expect.

The builder completed more than 10,660 homes last year, from studio apartments to five-bedroom houses. 

That was up 7 per cent from 2023 and more than expected. Forward sales were 8 per cent higher at £1.15billion.

Another builder, MJ Gleeson, bounced 4 per cent, or 17.5p, to 460p after confirming 2024 results were likely to be better than the previous year and would meet expectations – in spite of a subdued housing market.

Less encouragingly, Crest Nicholson delayed annual results to give its auditor, PwC, more time to count the cost of improving fire safety in its tall buildings. 

Profits up: Persimmon rallied by 5.5%, or 58p, to 1114p after reassuring investors that annual profits were likely to be towards the upper end of the range analysts expect.

Crest warned of a hit of about £130million from extra building safety costs. Crest shares still eked out an 2.9 per cent, or 4.6p, or 161p.

Housebuilders, traditionally a barometer of the wider economy, have been friendless of late as concerns about growth and the UK’s fiscal creditability deepen.

The prospect of slower cuts to interest rates by a Bank of England nervous about stubborn inflation and a stalling economy has further dampened enthusiasm for the sector. Higher rates make mortgages more expensive.

Similar concerns drove gilt yields to their highest in 16 years last week, diminishing the relative attraction of shares.

The FTSE 100 fell 0.3 per cent, or 22.65 points, to 8201.54 in relatively light trading. The FTSE 250 inched up 0.2 per cent, or 47.9 points, to 19766.27 despite the pound hovering around 14-month lows against the dollar. 

Markets were sitting on their hands ahead of the latest readings of inflation here and in the US today, which could offer fresh clues about the trajectory of interest rates. Meanwhile, they chewed through the latest wedge of company results.

Hunting, which makes equipment for the energy industry, rose a further 12.4 per cent, or 38p, to 345p after predicting 2025 would be ‘a further year of growth’. 

The update came against a backdrop of oil close to its dearest in four months following the recent toughening of US sanctions on Russia.

Camel cigarette maker British American Tobacco slid 0.6 per cent, or 17p, to 2916p after JP Morgan placed more than 43.3m shares, nearly 2 per cent of the company, with institutional investors at 2,820p each on behalf of Luxembourg-based Reinet Investments.

NatWest edged 1.1 per cent, or 4.2p, to 385.9p after the Treasury sold 86.4m shares. The Government’s stake is now just below 9pc following the 2008 bailout of Royal Bank of Scotland.

Activist investor Gatemore has called for the boss of polling firm YouGov (down 1.1 per cent, or 4p, to 368p) to be replaced after ‘numerous missteps’. Writing to the

YouGov board, Gatemore chief Liad Meidar warned of ‘widespread disappointment’ with boss Steve Hatch.